In a recent judgment of 3 April 2019 in the case of Powszechny,[i] the Court of Justice of the European Union (CJEU) ruled on the scope of application of the principle of ne bis in idem in national public enforcement of competition law by holding that a national competition authority (NCA) is not precluded from double sanctioning of an undertaking in a single decision for an infringement of national competition law on the one hand and for an infringement of the EU competition law on the other hand.
THE NE BIS IN IDEM PRINCIPLE
The ne bis in idem principle is mentioned in many national and international legal documents. Although traditionally it was primarily associated with criminal proceedings it now extends to proceedings of an administrative nature and may also be relied by corporations.
The ne bis in idem principle is recognised as a general principle of law at EU level and is also reflected in Article 50 of the Charter of Fundamental Rights of the European Union (Charter):
“No one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law.”
The CJEU has made clear that the principle of ne bis in idem, may apply in the context of competition law even in the absence of a formal criminalisation of anti-competitive conduct at EU level in view of the sanctions that can result from competition law. Therefore the ne bis in idem principle must be observed in proceedings for the imposition of a fine under antitrust law because of their similarity to proceedings at criminal law.
The established principle for competition law purposes provides that an undertaking may thus not be found liable and proceedings may not be brought twice on the basis of anticompetitive conduct for which it has been penalised or declared not liable by an earlier decision that has become final.[ii]
The case concerned the Polish NCA and Powszechny Zakład Ubezpieczeń na Zycie S.A., a Polish insurance company, with respect to a fine that the NCA imposed on the undertaking concerned for anticompetitive conduct.
In its decision of 25 October 2007, the NCA considered that the undertaking concerned had abused its dominant position on the market for group life assurance for employees in Poland by taking measures to prevent competition in the sector. The NCA concluded that the undertaking concerned not only infringed the national prohibition on the safeguarding of competition, but also the conduct of the undertaking concerned had a negative effect on opportunities of foreign insurers to access the Polish market, which could adversely affect trade between the Member States holding that it also infringed Article 102 TFEU.
In light of the above, the NCA imposed a single fine but composed of two separate parts: one for breaching national competition law, and the other for breaching EU competition law. In other words, the NCA has taken a single decision imposing a single fine (composed of two parts) on the basis of a concurrent application of national and EU competition law.
After having contested the decision of the NCA unsuccessfully before two lower instance courts, the undertaking concerned brought an appeal before the court referring the case to the CJEU. The undertaking concerned complained that the NCA decision violates the principle of ne bis in idem on the basis that both fines cover the same conduct and that the undertaking concerned has therefore been fined twice for the same conduct.
THE QUESTIONS POSED BY THE REFERRING COURT
The referring court sought a ruling from the CJEU on the proper interpretation of the following two questions:
‘(1) Can Article 50 of the [Charter] be interpreted as meaning that the application of the ne bis in idem principle presupposes not only that the offender and the facts are the same but also that the legal interest protected is the same?
(2) Is Article 3 of Regulation [No 1/2003], read in conjunction with Article 50 of the [Charter], to be interpreted as meaning that the rules of EU competition law and of national competition law which are applied in parallel by the competition authority of a Member State protect the same legal interest?’
THE RULING OF THE CJEU
The CJEU considered that the referring court was in essence asking whether the principle of ne bis in idem must be interpreted as precluding a NCA from fining an undertaking in a single decision for an infringement of national competition law and for an infringement of analogous provisions under EU law.
The CJEU firstly recalled that by virtue of Article 5 of Regulation No 1/2003 an NCA with the power to apply Article 102 TFEU, may impose fines, periodic penalty payments or any other penalty provided for in its national law.
The CJEU, decided the main question at issue very firmly and clearly.
Following its settled case-law it held that the principle of ne bis in idem aims to prevent an undertaking from ‘being found liable or proceedings being brought against it afresh’, which assumes that the person is found liable or declared not liable by an earlier decision characterised by finality. The case at hand was not characterised by multiple proceedings.
The CJEU therefore held unequivocally that the principle of ne bis in idem should not apply where the NCA applies national and EU competition law in parallel in the same proceedings. It therefore follows that an NCA is not precluded from fining an undertaking in a single decision for an infringement of national competition law and for an infringement of the equivalent EU law.
Nevertheless, the CJEU whilst recognising that the choice of penalties remains within the discretion of the competent competition authority, even though it was not requested, seized the opportunity to underline that when imposing two fines in a single decision for violations of both national and EU competition law NCAs must ensure that the fines are proportionate to the nature of the infringement. As the CJEU held, it “must ensure that, taken together, the fines are proportionate to the nature of the infringement”.
The CJEU rightly held that the ne bis in idem principle could not apply in this case given that the bis (i.e. the twice element) was missing. In fact, the NCA had taken a single decision imposing two fines on the basis of a concurrent application of national and EU competition law.[iii] As a result the CJEU did not have to address the interesting and more controversial question of whether analogous provisions of EU and national competition law which are being applied simultaneously protect the same legal interest. This was in fact explainable given its reasoning about the non-applicability of the ne bis in idem principle.
At the same time, the emphasis by the CJEU of the need to respect the principle that sanctions need to be proportionate to the nature of the infringement is to be highly welcomed.
[i] Powszechny v Prezes Urzędu Ochrony Konkurencji i Konsumentów,, ECLI:EU:C:2019:283
[ii] See Advocate General Wahl Opinion dated 29.11.2018, ECLI:EU:C:2018:976 at paragraph 19.
[iii] See Advocate General Wahl Opinion dated 29.11.2018, ECLI:EU:C:2018:976 at paragraphs 53 and 54.
By Polyvios Panayides and Christos Malikkidis of Chrysses Demetriades & Co.LLC, Limassol, Cyprus